The activity of dipeptidyl carboxypeptidase (DCP) was studied in rat brain stem using the substrate [3H]-benzoyl-phenylalanyl-alanyl-proline. Assays were performed using first-order enzyme reaction kinetics. The highest specific activity of DCP was found in the 49,500 g particulate fraction, with less activity in the 1000 g pellet and virtually no activity in the 49,500 g supernatant. This enzyme was present in both intact crude synaptosomal preparations and in the membrane -fraction of lysed synaptosomes, providing strong evidence that DCP is a membrane-bound enzyme. Depolarizing conditions did not alter enzyme activity. DCP activity was chloride ion sensitive and could be inhibited by captopril and EDTA. When the crude synaptosomal preparation was purified further, the highest specific activity of DCP was found in the enriched synaptosomal fraction. Although the endogenous substrate(s) for DCP in brain stem could be angiotensin I or bradykinin, it is als opossible that this enzyme is involved in the synthesis/degradation of the enkephalins. Further chracterization of the biochemical properties and physiological regulation of DCP is presently being undertaken using the adrenal medulla, a tissue rich in the enkephalins, as a model system.